Hyper-Deflation Capital Destruction And Gold & Silver / Commodities / Gold & Silver 2020
When aggregatedemand contracts, debts default, credit tightens, the velocity of money plunges,deflation ensues and capital, i.e. circulating credit and debt, is destroyed.In the extreme state of hyper-deflation, central bankers try to offset fatallyaccelerating capital destruction by creating even more money to replace thatwhich is being destroyed.
TheUnited States printed more money in June than in the first two centuries afterits founding.
Cointelegraph,July 31,2020
Velocity of M2 Money Stock 1960-2020
USbanks are ‘swimming in money’ as deposits increase by $2 trillion amid thecoronavirus. The wall of money flowing into banks has no precedent in history:In April, alone, deposits grew by $865 billion, more than the previous recordfor an entire year.
CNBC,June 21, 2020
TODAY’S RATE OF CAPITAL DESTRUCTION IS REFLECTED
IN THE UNPRECEDENTED GROWTH OF THE MONEYSUPPLY
The moneysupply, M3 (M2 monetary aggregates + institutional money funds and large timedeposits), ascended vertically in 2020 (see below) when global economiessuddenly contracted; forcing bankers to create unprecedented amounts of moneyto replace previously-created money now disappearing into deflation’sexponentially expanding monetary maw
Capitaldestruction unleashed after the 2008 financial crisis absorbed tens oftrillions of dollars created by central bankers in the decade between 2009 and 2019,negating concerted central bank efforts to artificially create growth throughmoney printing.
Zerointerest rates and QE gave central bankers a temporary reprieve to solve aninsolvable problem. In 2020, COVID-19 rendered their desperate efforts futile.More vulnerable to COVID-19 than the elderly with underlying health conditions,COVID-19’s global economic contraction fatally impaired capitalism’s ability topay the interest due on mountains of unpayable debt compounding daily.
Today’shyperbolic increase in the money supply may not end in a hyperinflationaryblowoff as previous bouts of monetary excess have done. Because of today’s extremehyper-deflation, capital destruction may absorb all the money central bankersprint without inflationary consequences; and, if not, hyperinflation isinevitable.
CAPITAL DESTRUCTION’S FIRST PHASE
DEFLATION (2009-2019)
CAPITAL DESTRUCTION’S FINAL PHASE
HYPER-DEFLATION (2020–2030)
(reposted with the permission ofSandeep Jaitly)
GOLD& SILVER
In August2020, gold and silver are rising even as central bankers hope to slow theirascent. Whether gold and silver will continue to ascend or be forced lower asin 2011 when central bankers flooded markets with gold bullion offered atnegative interest rates remains to be seen.
What iscertain, however, is that COVID-19 has backed central bankers into a monetary cornerwith no exit. Central bankers are now in retreat. Previous concerns about economicgrowth are now subrogated to the desperate desire to survive along with the capitalmarkets that have allowed them to obscenely profit from the enterprise ofothers for 325 years.
Fiatpaper money first appeared in Szechwan, China in 1024. Its thousand-yearanniversary, i.e. 2024, is four years away. Paper money’s Happy Anniversarysong, however, may be a funeral dirge. The central bank substitution of realmoney for debt-based paper coupons is about to end in dramatic fashion.
GOLD AND SILVER’S FINAL ASCENT WILL BEACCOMPANIED BY
THE CATASTROPHIC COLLAPSE OF DEBT-BASEDECONOMIES AND CURRENCIES
A BETTER WORLD WILL FOLLOW
THREEPREDICTIONS ABOUT THE FUTURE, i.e. NOW
In 1981, in “CriticalPath”, Buckminster Fuller predicted humanity was entering a crisis thatwould end in the collapse of nation-states, economies, e.g. communism andcapitalism, and religious institutions. The Universally-intended crisis willtransform humanity from a competitive, warring, state of scarcity into aninterdependent, interharmonious, cooperative whole with a higher standard ofliving for all.In 2004, COVID-19’s appearance was predicted by Sylvia Browne, thepsychic, in her book, “Prophecy:What the Future Holds for You:By2020 we’ll see more people than ever wearing surgical masks and rubber globesin public, inspired by an outbreak of a severe pneumonia-lie illness thatattacks both the lungs and the bronchial tubes and is ruthlessly resistant totreatment. This illness will be particularly baffling in that, after causing awinter of absolute panic, it will seem to vanish completely until ten yearslater, making both is source and its cure much more mysterious.In Endof Days, Predictions and Prophecies about the End of the World(2008)Sylvia Browne wrote: … Sometime between 2008 and 2020, Isee a sitting president dying in office of a heart attack. The vice presidentwho assumes the presidency will stun the world by announcing his intention todeclare war on North Korea in light of his accurate belief that they actuallyare in possession of weapons of mass destruction. His efforts to rallycongressional and international support for this declaration of war will be resoundinglyunsuccessful and the source of enormous alarm, and he will be assassinatedbefore his term ends.
2020 will mark the end of the US presidency and the executive branchof the government. America will finally be fed up …By 2020, we’ll seen the endof IRAs, mutual funds, pension, and retirement plans, and…the stock market.
Ralph Terry Foster, authorof FiatPaper Money: The History and Evolution of our Currency, after readingSylvia Browne’s prediction of COVID’s ten-year disappearance, made a prediction: Very interesting--ten years sounds right--but a more permanent phenomenon ishappening before our eyes, August 2020: In a mere matter of weeks theworld wide fiat monetary structures built over the last several decades willcrumble to worthlessness--our monetary systems will go back to those of themiddle ages where hard money commands. The purchasing power of goldand silver coins will reach all time historic highs. With modern technologypeople will demand hard sound honest money units if society is to remaincivil. Few grasp the enormity of this change.Ralph Foster, August 2, 2020
In 2008,Sylvia Browne’s predictions seemed far-fetched. In August, 2020, they seem lessso. We have four months left in 2020. A lot can happen in that time. A lotalready has.
THE WORLD ISN’T WHAT IT APPEARS TO BE
IF IT WAS, WE’D BE IN TROUBLE
Should thepandemic end next spring after “a winter of absolute panic” (Sylvia Browne’s words),Ralph Terry Foster, Sandeep Jaitly, Peter Von Coppenolle, Martin Hickling and Iwill be speaking April 10 & 11, in London.at Imperial College School ofMines. The subject will be Money: Rock, Paper, Scissors,For details, see http://www.drschoon.com/events . It should be interesting.
Myinterview, China, Power& Money , part 1, is posted at https://www.youtube.com/watch?v=4pZQlRFzeNA&t=187s ,
Part 2 ofthe interview, The Pendulum ofChange is a Wrecking Ball, is posted at https://www.youtube.com/watch?v=f71AdWpyRTs&t=162s .
ConspiracyTheories Revisited is the subject of another interview posted at
https://www.youtube.com/watch?v=uFtn2EnTkLg&t=468s
See youin London, God willing.
Buy gold,buy silver, have faith.
By Darryl Robert Schoon
www.drschoon.com
About Darryl Robert Schoon
In college, I majored in political science with a focus on East Asia (B.A. University of California at Davis, 1966). My in-depth study of economics did not occur until much later.
In the 1990s, I became curious about the Great Depression and in the course of my study, I realized that most of my preconceptions about money and the economy were just that - preconceptions. I, like most others, did not really understand the nature of money and the economy. Now, I have some insights and answers about these critical matters.
In October 2005, Marshall Thurber, a close friend from law school convened The Positive Deviant Network (the PDN), a group of individuals whom Marshall believed to be "out-of-the-box" thinkers and I was asked to join. The PDN became a major catalyst in my writings on economic issues.
When I discovered others in the PDN shared my concerns about the US economy, I began writing down my thoughts. In March 2007 I presented my findings to the Positive Deviant Network in the form of an in-depth 148- page analysis, " How to Survive the Crisis and Prosper In The Process. "
The reception to my presentation, though controversial, generated a significant amount of interest; and in May 2007, "How To Survive The Crisis And Prosper In The Process" was made available at www.survivethecrisis.com and I began writing articles on economic issues.
The interest in the book and my writings has been gratifying. During its first two months, www.survivethecrisis.com was accessed by over 10,000 viewers from 93 countries. Clearly, we had struck a chord and www.drschoon.com , has been created to address this interest.
Darryl R Schoon Archive |
© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.